Pakistan's refineries have warned of a looming petrol crisis by mid-February if the government fails to resolve the payments issues of imported raw materials and additives needed by the sector, media reports said on Friday.

The delay in payments of raw materials and additives as well as the dollar shortage hampered the production of petrol massively, the refineries explained, The News reported.

"The situation will become extremely critical by mid-February if remedial measures are not taken immediately," local refineries warned Petroleum Minister Musadik Malik and the Governor of State Bank of Pakistan (SBP), Jameel Ahmed, in separate letters.

The letters were jointly written by Pakistan Refinery Limited, National Refinery, Attock Refinery and Cnergyico Refinery, The News reported.

Difficulties in establishing letters of credit (LCs) for the payment of raw materials and other inputs needed by the refineries have been cited as the major cause of the looming crisis. Pakistan Punjab has already started experiencing the unavailability of petrol, after alleged hoarding in anticipation of the price hike expected in the next fortnightly review.

As per the letter, the SBP issued a priority list of essential imports for foreign remittances of critical industries and petroleum products were included in that priority list.

However, imports of essential raw materials and additives mainly N-Methylaniline (NMA - a non-metallic RON booster) against which LCs have already been established are being held by the banks for release of documents and payments. Moreover, the banks are reluctant to establish LCs for NMA imports against which payment for the month of February/March 2023 are falling, it stated.

The refineries cautioned that the delay or suspension of foreign payments for imports of such essential raw material/additives including establishing credit letters for the same would seriously hamper the operations of refineries, especially the local production of mogas (petrol), The News reported.

Keeping in view the shortages that have been surfacing in different parts of the country, the Pakistan Petroleum Dealers Association (PPDA) has asked the Ministry of Petroleum and Natural Resources to immediately formulate a committee to find out the reasons behind this shortage, The News reported.